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Medium · options_pricing · Quant Researcher interview question · options, implied-volatility, black-scholes, bisection, numerical-methods
Implied volatility is the market's forecast of future price movement, derived by inverting the Black-Scholes model to match an observed option price. As a critical input for volatility surface construction and relative-value trading, it must be calculated numerically. This problem uses the bisection method, a robust root-finding algorithm, to solve for implied volatility. Task Implement the function solution(market_price: float, S: float, K: float, T: float, r: float, opt_type: str = 'call') ->